Insurance Exchanges

A short explanation of the Affordable Care Act's insurance exchanges is available on our ACA Basics  page, and is repeated here as an overview. This page provides more information about the exchanges.

Overview
The ACA’s health insurance exchanges are meant to be virtual marketplaces where individuals and families can comparison shop for health coverage. There will also be exchanges for small businesses. The exchanges are to be open for plan enrollment by October 1, 2013, ahead of coverages beginning January 1, 2014. States have three options regarding their design:

·         to establish their own,

·         to establish them in partnership with the federal government, or

·         to let the federal government establish them.


The exchanges will be most useful for those who don’t have access to employer-based coverage, and who don’t qualify for public programs like Medicaid. Individuals and families with incomes between 100 percent and 400 percent of the federal poverty level ($23,050-$92,200 for a family of four in 2012) will receive income-based subsidies to help them afford coverage, and small businesses will also receive tax credits to help them afford coverage for their employees. By 2022, the Congressional Budget Office estimates that 25 million Americans will have coverage through the exchanges.

APHA and external resources are listed below.

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Public health professionals: Looking for resources to help you educate your community about the Marketplaces and other ACA reforms?

Consumers: Looking for information about how the ACA will affect you?

Go back to the main page of the health reform section of APHA's website for resources and links to the official websites of the ACA and the Health Insurance Marketplaces.

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Other frequently asked questions

1. What are the insurance exchanges?

2. Who will use the insurance exchanges?

3. How are the exchanges an improvement over the current system?

4. Where can I find information about states' progress implementing the exchanges?

5. How can public health practitioners become involved in the exchange implementation process?


1. What are the insurance exchanges?
The ACA’s health insurance exchanges are meant to be virtual marketplaces where individuals and families can comparison shop for health coverage. There will also be exchanges for small businesses. States may set up exchanges themselves or in partnership with the federal government, or the federal government will set them up in states that can’t or won’t do so by 2014, when they are to become effective. (FAQ top)

2. Who will use the insurance exchanges?
The exchanges will be most useful for those who don’t have employer-based coverage, and who don’t qualify for public programs like Medicaid. They will also be useful for small business owners seeking coverage options for their employees.

In 2012, more than half of U.S. consumers below age 65 received insurance through their employers (also called “group” coverage), and another 13 percent received coverage through public programs like Medicaid. These individuals will likely have very little, if any, interaction with the exchanges. 

However, 6 percent of consumers purchased coverage on their own, through the “individual” or “non-group” market, likely because they were self-employed or their employer didn’t offer coverage. Another 20 percent of the population was uninsured, but might have been able to purchase coverage in the non-group market if they could better understand their options or afford a plan. While the ACA's Medicaid expansion is meant to cover many of the lowest-income uninsured, and other provisions are intended to increase the number of workers that can access coverage through their jobs, the exchanges are meant to make it easier and more affordable for others to purchase private coverage in the individual market. Exchanges for small businesses are also intended to make it easier and more affordable for those employers to cover their employees. (FAQ top)

3. How are the exchanges an improvement over the current system? 
Historically, plans purchased in the individual market (see above) have been more expensive and offered fewer benefits than employer-based plans, and it has been difficult for consumers and small business owners to clearly compare their options. The exchanges will make the process of comparing and purchasing plans more transparent, and will create incentives for insurers to compete for consumers’ business. Key ACA provisions will improve benefits and lower costs for consumers and small businesses purchasing plans in the exchanges.  Selected provisions are summarized here; follow links for more information from the Georgetown University Health Policy Institute's 
Health Insurance 101 project.

  • Easy navigation, no wrong door: The exchanges will consist of websites and other ways for consumers and small businesses to determine their options for coverage (including consumer eligibility for Medicaid and other public programs). Regarding plans in the exchange, shoppers will be able to compare benefits, costs, provider networks, and other features; see the subsidy they are eligible for; and purchase the plan of their choice.
  • Essential health benefits: In order for a plan to qualify to be sold through the exchange, it will have to offer a defined set of essential health benefits. This will mean that all plans will meet basic quality requirements.
  • Affordability subsidies and tax credits: Finally, the federal government will offer income-based subsidies to help individuals and families purchase plans through the exchange. People with incomes between 100 percent and 400 percent of the federal poverty level will qualify for subsidies that will ensure that insurance does not cost families more than 9.5 percent of their incomes. Tax credits will also be available to help small businesses afford coverage for their employees. (FAQ top)

4. Where can I find information about states' progress implementing the exchanges?
As noted above, states may set up exchanges themselves or in partnership with the federal government, or the federal government will set them up in states that can’t or won’t do so by 2014, when they are to become effective.
 The federal government is providing funds to the states to use in setting up their exchanges. Several organizations are tracking state progress in implementing the exchanges; see below for links. (FAQ top)

5. How can public health practitioners become involved in the exchange implementation process? 
Trust for America's Health has prepared 
this memo outlining potential ways that public health stakeholders can become involved in their state's exchange implementation process. (FAQ top)

Resources:

For more information, visit our Useful Links page.

APHA is continuing to update its health reform website and resources. Please check back as we add new content.   

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